Minister of State at the office of the Ministry of Finance, Dr. Mohammed Amin Adam says the Extractive Industries Transparency Initiative (EITI) remains a good global governance programme aimed at helping natural resource-rich countries to realize the full benefits of their natural resources, through open, participatory, and accountable management.
According to Dr. Adam, the EITI Standard has evolved to include disclosures in the other links of the extractive industry value chain.
Speaking at the launch of the 2022 EITI Mining and Oil/Gas Report covering the period 2020 in Accra, he said "These include disclosures on contracts, production, exports, revenue management and utilisation, environmental monitoring, and reporting, as well as beneficial ownership."
"The Initiative sets out to address the paradox of plenty, or what is commonly referred to as the resource curse syndrome. Based on this and others, Ghana became a signatory to EITI in 2003 with the objective of using it as a diagnostic tool to guide reforms in the country’s extractive industry"
He noted that Ghana is bestowed with rich mineral resources and has a well-regulated mining and oil/gas sectors which has grown significantly over the years to represent an important pillar of the Ghanaian economy.
He also stressed the mining and oil/gas sector plays a vital role in the Ghanaian economy.
"I am glad to inform you that proceeds from the export of minerals increased from US$ 6.678 billion in 2019 to US$ 6.998 billion in 2020. This translates into a 4.8 percent year-on-year expansion in mineral revenue. The total number of persons employed by the large-scale mines as at 2020 was 34,363. This comprised 8,760 direct employees and 25,603 contractors. The proportion of Ghanaians in the workforce was 98.7 percent. Receipts from the export of minerals represented 48.4 percent of the country’s total merchandise export revenue in 2020. The relative contributions of crude oil and cocoa were 20.1 percent and 16.1 percent in the same year respectively"
He disclosed that for the mining sector, the volume of bauxite produced increased from 1.116 million tonnes in 2019 to 1.162 million tonnes in 2020, recording a 4 percent year-on-year growth in its output.
"According to the Ghana Revenue Authority (GRA), the mining and quarrying sector’s contribution to total fiscal revenue increased from GH₵ 4.052 billion in 2019 to GH₵ 4.398 billion in 2020, representing an upturn of 8.5 percent. The growth in fiscal payments attributable to the mining and quarrying sector was largely explained by the increase in royalty revenue and dividends, which offset the decline in the other types of fiscal payments."
"he value of mineral royalties mobilised by the GRA rose from GH₵ 1.006 billion in 2019 to GH₵ 1.391 billion in 2020, which translates into a growth of 38.20 percent. The increase in mineral royalty payments was primarily due to a record-level prices observed in 2020"
"In addition, the Bank of Ghana’s data shows that proceeds from the export of minerals increased from US$ 6.678 billion in 2019 to US$ 6.998 billion in 2020. This translates into a 4.8 percent year-on-year expansion in mineral revenue that was driven primarily by an increase in export earnings from gold and bauxite. According to the Central Bank, revenue from gold exports rose from US$ 6.229 billion in 2019 to US$ 6.799 billion in 2020, while that of bauxite improved from US$ 35.99 million to US$ 37.72 million over the same period"
Dr. Amin Adam strevealed that the total number of persons employed by the large-scale mines was 34,363 in 2020.
This, he explained, comprised 8,760 direct employees and 25,603 contractors.
"The proportion of Ghanaians in the workforce was 98.7 percent (33,919) while the corresponding outturn for expatriates was 1.3 percent. In terms of gender, the total number of female employees was 2,752, which comprised 20 expatriates and 2,732 nationals. Further, the male employee population of 31,611 was made up of 424 expatriates and 31,187 nationals. This implies that males and females constitute 92 percent and 8 percent of the sub-sectors workforce respectively, which is not significantly different from the national gender-employment distribution of the mining and quarrying sector"
He stressed that Government through the state agencies will continue to work collaboratively with industry to build local capacity within the extractive sector and to ensure that its policies, regulatory and legal frameworks on local content and local participation are respected for a win-win situation to the country and the investor community.
"I am happy to inform you that in the oil and gas sector, a total revenue of US$666.39 million accrued to the State in the year 2020 from Royalties, Carried and Participating Interest (CAPI), Corporate Income Taxes (CIT), and Surface Rentals. A total of 88,418.88 MMscF (Million Standard Cubic Feet) valued at US$606.5 million of both associated and non-associated gas was delivered for domestic power generation. The year 2020 marks a decade of commercial production of oil and gas from the Jubilee field"
It is emerging that the upstream oil and gas sector in Ghana contributed 3.7 percent to the Gross Domestic Product (GDP) of Ghana in 2020.
A total of 11,615,029 bbls of crude oil was exported by GNPC in respect of CAPI and royalties for an amount of US$496,286,197.87.
The total crude oil exports for 2020 as reported by the Bank of Ghana was 67,458,206 bbls.
"I would like to emphasise that despite the importance of fiscal receipts from oil and gas resources, as a government, the strategy from the medium to long term is to leverage this resource to establish the linkages and to boost the other sectors of the economy. In line with this, government and a Moroccan company, the OCP Group, have completed the front-end engineering design (FEED) for a US$1.3 billion fertilizer complex in Takoradi in the Western Region towards the production of fertilizer from Ghana’s natural gas"
The project, he disclosed is expected to be completed in three years and will help increase fertilizer availability and reduce input costs to farmers to fast track the industrialization of the agricultural sector.
"For me, recent developments in terms of decline of our oil and gas production coupled with the potential negative impact of energy transition leading to low investment in the sector, call for the need to consider other areas with a view to ensuring diversification and reducing the impact on the economy for sustainable development."
"Mr. Chairman, the contribution of the upstream oil and gas sector to energy generation in Ghana cannot be over-emphasized. A total of 88,418.88 MMscF of both associated and non-associated gas was supplied from the three producing fields for domestic power generation as against 54,053.82MMscF in 2019"
A total gas of 28,842.61 MMscF supplied from both Jubilee and TEN fields and delivered to GNGC was valued at US$152,702,353.64 while 56,459.26 MMscF supplied by SGN partners to GNPC was valued at US$453,761,223.
The gas from SGN was delivered via the Sanzule Onshore Receiving Facility (ORF) to various power producers for power generation.
Daily recorded gas export from SGN, Jubilee, and TEN was 241.8MMscF as against the 220MMscF target.
He told the gathering that government received more gas in 2020 and this impacted on domestic energy supply during the period of the COVID-19 pandemic, which positively supported management of the pandemic.
On his part, Deputy Minister for Lands and Natural Resources responsible for mining, George Mireku Duker said "It should be noted that it is in this context that, Ghana, through our Ministry which is responsible for mining, signed on to the EITI, some 20 years ago, in 2003 as the first country to do so with respect to mining. Other countries may have signed on then, but only in respect of oil and gas. It is no wonder that, recognizing the Initiative’s focus on championing broad based development through the extractives, the country again signed on to the EITI with respect to its oil and gas in 2010 when subsector activities commenced"
"It is also a key reason why, through the Ghana Landscape Restoration and Small-Scale Mining Project, the Ministry has provided financial support in the preparation of the Reports for 2020 which we are about to launch.
"Ladies and gentlemen, through the Ministry, the Project is also supporting the EITI secretariat to design, print and distribute 1000 copies of the reports we would be launching, including a braille version to ensure that all visually challenged persons can access and read the reports"
Hon. Duker assured stakeholders that government, through the Ministry of Lands & Natural Resources, has only one goal in managing and regulating the country’s mineral and other natural resources under its authority to ensure their responsible extraction and utilization for sustainable growth and development and for the benefit of the nation and its citizens.
"I therefore believe the publication of these reports are also in furtherance of the African Mining Vision (AMV), which is geared toward achieving the Sustainable Development Goals (SDGs).
I wish to commend immensely the role of the Multi-Stakeholder Group (MSG) of the Ghana Extractive Industries Transparency Initiative (GhEITI) and its collaborators, including Development Partners, for assiduously working towards ensuring publication of these reports since Ghana signed on to the EITI. The collaborative extractive industry players need to be mentioned for their noble efforts in facilitating implementation of initiatives, programmes, and strategies for adopting the EITI standards to ensure an effective utilization of Ghana’s natural resources for the benefit of all. This aligns with and is at the core of the mandate of the Ministry of Lands and Natural Resources"
He noted that in recent years, his Ministry has witnessed substantial improvements in its resource governance framework, resulting in increased transparency and accountability.
"This notion is backed by the Resource Governance Index framework developed by the Natural Resource Governance Institute in which as of their 2017 report, Ghana’s gold mining sector scored a total of 56 out of 100 points where poor management of mineral and economic rents were rife. In the recent 2021 report, Ghana scored a total of 69 out of 100 points, a 13-point increase within four (4) years"
He explained that the 2021 report saw the revenue management sub-component rising from 37% in 2017 to 54%.
"Through the EITI process, we have engaged with local and international stakeholders, fostering partnerships that have contributed to the success we celebrate today. These reports are a testament to our commitment as a country to adhere to global best practices, ensuring that the benefits derived from our natural resources are shared equitably among our citizens.
However, as we celebrate our achievements, we must also recognize the challenges ahead. We must remain steadfast in our pursuit of continuous improvement, as there is always room for enhancing our practices, strengthening regulatory frameworks, and addressing emerging issues. We must embrace innovation, technology, and sustainable practices to safeguard our environment while maximizing the potential of our extractive industries"
He stressed that Ghana's mining policy document, adopted by the government in 2016, which is currently under review to incorporate contemporary developments, highlights the mining sector as one of the key economic pillars for stimulating growth on a strong and sustainable basis.
"In this sense, the major axes for the development of the mining sector revolve, in particular around the control of mining activities based on Ghana's mineral exploration potential; the adoption of robust geoscientific information systems; and appropriate investor-friendly legal and regulatory frameworks.
It is important to develop a well-structured mining sector that contributes towards attaining sustainable, strategic development objectives for Ghana. These should include contributing to poverty reduction, the creation of employment opportunities for youth and the initiation of economic growth in line with the Africa Mining Vision and Sustainable Development Goals"
"In this regard, my Ministry as part of the 6-year Ghana Landscape Restoration and Small-Scale Mining Project (GLRSSMP) is strengthening the capacities of beneficiary agencies to adopt current technologies and innovative principles and create pathways to enable easy and timely disclosure of information to enhance EITI reporting in coming years. It is expected that work on the predominantly informal Artisanal and SmallScale Mining (ASM) subsector, in this respect, will help to mainstream it"
The Deupty Minister for Lands and Natural Resources responsible for Mining thanked hardworking men and women within his Ministry, particularly those directly working at the Project Coordinating Unit, as well as esteemed extractive partners and stakeholders, especially the GhEITI-Multi-Stakeholder Group, for their unwavering dedication towards fostering the adoption and application of the principles of transparency and accountability in the management of Ghana’s extractive industries.
Story by: Joshua Kwabena Smith